House prices decline again in September
VOLATILITY continued in the housing market, with September’s price falls reversing gains seen in June and July, the Halifax index revealed yesterday.
Prices are down 0.5 per cent compared with August and 2.3 per cent over the last 12 months, the seasonally adjusted figures show.
The rate of decline has slowed from its peak of 4.6 per cent in the year to May.
However, prices did increase by 0.1 per cent over the third quarter, and the annual pace of decline is at its lowest since December 2010.
The average price of a UK house sold in September stood at £161,132, down from £162,307 in the same month last year.
The study said mortgage payments account for 26 per cent of a new borrower’s disposable income, down from 48 per cent in mid-2007.
In terms of sale volumes, around 70,000 were sold last month, in line with the average for 2011.
Halifax believes that gradual employment growth over the year combined with low interest rates have supported the market – but that negative factors are also weighing on house prices.
“Greater uncertainty about economic and personal financial circumstances, together with pressure on householders’ finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand,” explained Halifax economist Martin Ellis.
“We expect little change to this situation over the remainder of 2011.”
However, estate agents believe there is more reason for some optimism.
“Halifax’s figures point to a rather gloomy outlook for the national housing market in September, but there are certainly signs of life,” said Peter Rollings from estate agent Marsh and Parsons.
“Mortgage lending has picked-up in recent months, and the current price war between lenders is making mortgages increasingly affordable. Lending has never been cheaper for those who have already saved up for their deposits.”